Council ‘could go bust’

David Coates

Preston Council is staring bankruptcy in the face if it does not share its back office with local councils, it has been claimed.

Leader Peter Rankin has revealed it is talking with neighbouring authorities about bringing services under one roof in a move which could see jobs cut among its 1,000-strong workforce.

It has also asked the Government for a ‘bridging loan’ for an unspecified amount to keep its finances out of the red as it battles savage spending cuts.

Today, the council’s Liberal Democrat group claimed Town Hall finances will be in the red within two years without major savings.

Coun Rankin admitted it was looking at “a number of unpalatable options” as it bids to cut its costs.

He said: “We know our finances are okay for this coming year, but we need to make further savings if that is going to be the case in the future.

“The cabinet will be sitting down with our senior management team soon to look at what happens beyond this year.”

The leader admitted it was “inevitable” that jobs would have to go if services were shared with other councils.

It already shares its benefits back office with Lancaster Council and further savings could even mean having one IT department, one human resources team and even having a single top brass covering several authorities.

Coun Rankin said: “Most of the money we pay out goes on employing people.

“I do not want to speculate on the level of any reductions because it is a sensitive subject, but we know there are decisions which have to be taken.”

The leader revealed it had asked Planning Minister Nick Boles, who he met to plead for a better financial settlement at Westminster last week, for an “efficiency loan” to see the council through the financial storm.

He believes it could be enough to tide it over until a huge road-building scheme, envisioned under Preston’s bid for a City Deal, sparks a house-building landslide within the next five years.

Coun Rankin said: “We want to build new houses but we are held back by our infrastructure problems; if we can build them, we benefit from New Homes Bonus payments from the Government.”

Chorley Council got £1.8m in bonuses for the new homes built at Buckshaw Village, whereas Preston got less than £300,000.

The council’s Liberal Democrat group will call on it to share services and cut the number of councillors at next month’s budget.

Group leader Bill Shannon said the without making £1m of savings in the next year, followed by £2m, £3m and £3.3m in the following three years, it will be out of cash by 2015.

The Lib Dems will propose sharing both frontline and back office services with councils such as South Ribble, Chorley, Ribble Valley, Wyre, Fylde, Lancaster and even Blackburn with Darwen and Blackpool.

It will also call on the number of councillors being slashed from 57 to just 40, to save cash.

Coun Shannon said: “If we do not take the dramatic decisions fast, we will run out of money.

“The threat of not doing this is closing leisure centre, the Harris Museum, stopping maintaining our parks or halting the development of our markets.”

On reducing councillor numbers, Coun Rankin said: “With the cuts the Government has in store for the country in the years to come, I think people are going to need their councillors more than ever.”

Last year, the Liberal Democrat put forward budget proposals to demolish the bus station and mothball the city’s Guild Hall, with a decision taken on the bus station by the ruling Labour group this month.

Coun John Potter, the group’s finance spokesman, said the 12-month delay in the decision on the bus station had cost taxpayers’ £1,000-a-day.

He said: “This is not a victimless delay, for every day it takes to cut the cost of the bus station those costs continue to mount and, if you include the costs of the Guild Hall, it comes to £3,000-a-day.”